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Tuesday, 06 September 11
INDONESIAS PROPOSED COAL EXPORT BAN MAY HAVE IMPACT ON THE INDIAN POWER SECTOR - DIPESH DIPU
.jpg) COALspot.com - This is a special interview about Indonesian proposed coal export ban by 2014, with Mr. Dipesh Dipu, Director of Deloitte Touche Tohmatsu, India.
The Indonesian government is currently in the process of drafting a new regulation that could ban the export of low-grade coal by January 12, 2014. This is likely to apply to coal below 5700 kcal/kg on air dried basis in value.
As of now Indonesia is producing around 150 million tons of coal with calorific value below 5700 GAD (according to chairman of Indonesian coal mining association). However by 2014, there are possibilities the total production of below 5700 GAD coal may reach more than 200 million per annum.
Will Indonesian coal export ban impact on the Indian fuel requirements?
The earlier grade of coal that was being considered for proposed ban has GCV of 5100 kcal/kg of less (adb), which can be comparable to 3800-4200 kcal/kg (arb) domestic coal available in India. This grade of coal has found favor in India primarily due to likely price advantage but economics of power generation based on such grade of imported coal may be a suspect. This considering that such grades of coal from Indonesia typically have high moisture content, which makes transportation cost per unit of energy generated higher. The quantum of the low grade of coal (<5100 kcal/kg adb) procured from Indonesia is likely to remain relatively low.
However, if the new definition of low grade coal is applied (<5700 kcal/kg adb), it may be reasonable to believe that such a ban may have impact on the Indian power sector as volumes in this grade of coal are expected to rise in the proportion of coal exports to India. Several of the acquisitions made by Indian power generation companies in Indonesia have been in coal blocks that will produce coal of this grade, and a blanket ban on the exports can jeopardize power plant development in India.
On the other hand, the domestic Indonesian market may not be prepared to consume all the coal mined of this grade in view of the power generation capacity addition plans in Indonesia. In such a case, the coal mine development is likely to be deferred. The Indonesian law makers may need to reconsider domestic market demand, investment climate in coal sector and impact of the legislation on the export revenues.
What is the alternative source for Indian power industry if the proposed coal export ban come into effect by 2014?
Indian power generation companies have been forced to look out for coal assets abroad due to the investment and regulatory environment within the country. India boasts of more than 110 billion tonnes of coal reserves, which largely fall within a 300 meters of depth. If the regulatory and investment environment is amended to allow greater participation of private sector Indian dependence on imports will be reduced.
However, for imports, India will continue to look at Indonesia, South Africa, Australia and newer destinations like Mozambique and Columbia. But these sources also have constraints, domestic demands in South Africa is likely to restrict quantum jump in exports out of South Africa. Indonesia has also proposed domestic market obligations. Mozambique may have infrastructure constraints for large volumes of coal being transported from Tete province to ports of Maputo, Ncala or Beira. Australian coal is of high quality but may have higher costs of mining and transport.
What would be the additional cost if Indian consumers switch their sourcing origin from Indonesia?
Indonesia has competitive advantage due to its geographical closeness. However, on a per tonne basis, assuming comparable quality, costs of transport may make marginal difference when compared with South Africa and Mozambique.
When compared to Australian coal, due to the high quality, cost of energy may well be comparable even though shipping costs are higher. Between Indonesian coal (5500 kcal/kg adb priced at USD 90 per tonne) and Australian coal (6500 kcal/kg adb priced at USD 120 per tonne), indicative variable cost difference of power generation may be about Indian Rupees 0.20 to 0.30 per kWh (electricity unit) in favor of Indonesian coal.
Will it affect Indian economy growth or this coal export ban is ignorable as India can easily identify alternative sources of fuel?
The magnitude of growth in power generation in India will necessarily mean that coal will remain the mainstay. Natural gas has had issues of availability. Nuclear plant development is facing socio-political challenge in view of the risks of technology failure. Development of hydel power has also faced issues of land acquisition, rehabilitation & resettlement apart from the technical issues of hydro-geological features. Renewable sources such as solar and wind generation are still projected to constitute a small portion of India power generation mix. Identifying an alternative source that can match coal in its accessibility, availability and affordability in the context of scale of capacity addition required in India is a challenge.
What is the Indian government's role on this issue, whether government has to come out with the solution such as easing Indian mining and environment law, open up mining for foreigners, G2G arrangement, etc…?
There is a need to look at domestic sources with pro-active and constructive approach and make all necessary legal and statutory amendments that make the resources available and mineable. Easing the regulations may not be one of such measures but making those regulations work in sync with each other in a time bound and predictable manner must certainly be.
There is certainly a case for opening the domestic coal sector for private participation, including independent miners, and for foreign participation so that newer technology and enhanced scale of operations are implemented in India. The regulation also needs to permit risk capital to come in for prospecting and exploration.
For imports the G2G relations can be leveraged to secure coal assets. India has good relationship with Indonesia and has also signed a tax treaty with Mozambique in 2010 which will facilitate investments. Government may also engage with these countries to ease exports to India and extend fiscal support to coal mining companies investing in mining and associated infrastructure development.
About Dipesh Dipu
Dipesh Dipu works as Director with Deloitte Touche Tohmatsu India Pvt. Ltd in the Energy and Resources consulting practice of the firm and anchors the Firm’s initiative in the mining and metals sectors.
He is a mining engineering graduate from Indian School of Mines and is a Chartered Financial Analyst (CFA). He has also done executive program in business management from Indian Institute of Management Calcutta. Dipesh has recently been awarded the Abheraj Baldota Gold Medal for the Young Mining Engineer of the Year 2007 by the Mining Engineers’ Association of India in recognition of his contributions in the improvement of mining industry in India.
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Tuesday, 13 October 09
INDIA INTERESTED IN AMERICAN COAL
UPI reported that, Coal India Ltd. in its global expansion efforts is now interested in coal properties in the United States.
The Business Standard ...
Tuesday, 13 October 09
RIVERSDALE MAY USE ZAMBEZI RIVER TO TRANSPORT MOZAMBIQUE COAL
Mining Weekly reported that, ASX-listed coal-miner Riversdale Mining would submit a feasibility study and an environmental-impact study (EIS) for it ...
Monday, 12 October 09
INDONESIAN COAL MINER SAYS PLANS IPO IN 2010
Reuters reported that, Indonesian coal miner PT Bhakti Energi Persada plans an initial public offering in the first quarter of 2010 to develop coal ...
Monday, 12 October 09
BISICHI MINING FINALIZES COAL SUPPLY CONTRACT FOR 2010-2012
Small Cap News reported that, Bisichi, the South Africa based coal mining group, has agreed a three year coal supply contract between its principal ...
Monday, 12 October 09
SHANDUKA BUYS SACMH RICHARDS BAY COAL ALLOCATION
* Shanduka Coal takes SACMH 500,000T export space
* RBCT must approve any change of ownership
Reuters reported that, South Africa's Shanduka Co ...
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- ASAPP Information Group - India
- Metalloyd Limited - United Kingdom
- Global Green Power PLC Corporation, Philippines
- Pendopo Energi Batubara - Indonesia
- Barasentosa Lestari - Indonesia
- Bukit Makmur.PT - Indonesia
- Siam City Cement PLC, Thailand
- Indika Energy - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Commonwealth Bank - Australia
- Coastal Gujarat Power Limited - India
- Therma Luzon, Inc, Philippines
- New Zealand Coal & Carbon
- Parliament of New Zealand
- Straits Asia Resources Limited - Singapore
- Manunggal Multi Energi - Indonesia
- Electricity Generating Authority of Thailand
- Kaltim Prima Coal - Indonesia
- Intertek Mineral Services - Indonesia
- Mjunction Services Limited - India
- Ministry of Mines - Canada
- Interocean Group of Companies - India
- Mercator Lines Limited - India
- Sojitz Corporation - Japan
- Singapore Mercantile Exchange
- Port Waratah Coal Services - Australia
- Videocon Industries ltd - India
- Indogreen Group - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- The University of Queensland
- AsiaOL BioFuels Corp., Philippines
- Maharashtra Electricity Regulatory Commission - India
- Global Coal Blending Company Limited - Australia
- Salva Resources Pvt Ltd - India
- SN Aboitiz Power Inc, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- GVK Power & Infra Limited - India
- Energy Development Corp, Philippines
- Baramulti Group, Indonesia
- Bangladesh Power Developement Board
- Binh Thuan Hamico - Vietnam
- Coalindo Energy - Indonesia
- Bhushan Steel Limited - India
- Kepco SPC Power Corporation, Philippines
- Aboitiz Power Corporation - Philippines
- Krishnapatnam Port Company Ltd. - India
- London Commodity Brokers - England
- Antam Resourcindo - Indonesia
- Medco Energi Mining Internasional
- Altura Mining Limited, Indonesia
- Meenaskhi Energy Private Limited - India
- Global Business Power Corporation, Philippines
- Cigading International Bulk Terminal - Indonesia
- International Coal Ventures Pvt Ltd - India
- Simpson Spence & Young - Indonesia
- MS Steel International - UAE
- Sree Jayajothi Cements Limited - India
- Essar Steel Hazira Ltd - India
- PNOC Exploration Corporation - Philippines
- Goldman Sachs - Singapore
- Sinarmas Energy and Mining - Indonesia
- Bukit Baiduri Energy - Indonesia
- Deloitte Consulting - India
- Bharathi Cement Corporation - India
- Georgia Ports Authority, United States
- Australian Coal Association
- CIMB Investment Bank - Malaysia
- Riau Bara Harum - Indonesia
- PowerSource Philippines DevCo
- Africa Commodities Group - South Africa
- The Treasury - Australian Government
- Kideco Jaya Agung - Indonesia
- Vedanta Resources Plc - India
- Xindia Steels Limited - India
- Chettinad Cement Corporation Ltd - India
- LBH Netherlands Bv - Netherlands
- Anglo American - United Kingdom
- Vizag Seaport Private Limited - India
- Jaiprakash Power Ventures ltd
- Pipit Mutiara Jaya. PT, Indonesia
- Marubeni Corporation - India
- Makarim & Taira - Indonesia
- Gujarat Sidhee Cement - India
- Gujarat Mineral Development Corp Ltd - India
- SMG Consultants - Indonesia
- Latin American Coal - Colombia
- Mintek Dendrill Indonesia
- IEA Clean Coal Centre - UK
- Semirara Mining and Power Corporation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Orica Mining Services - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Banpu Public Company Limited - Thailand
- Dalmia Cement Bharat India
- Coal and Oil Company - UAE
- Tata Chemicals Ltd - India
- Electricity Authority, New Zealand
- McConnell Dowell - Australia
- Globalindo Alam Lestari - Indonesia
- Malabar Cements Ltd - India
- Energy Link Ltd, New Zealand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Central Electricity Authority - India
- Standard Chartered Bank - UAE
- Maheswari Brothers Coal Limited - India
- Heidelberg Cement - Germany
- Thiess Contractors Indonesia
- South Luzon Thermal Energy Corporation
- Miang Besar Coal Terminal - Indonesia
- White Energy Company Limited
- Indian Oil Corporation Limited
- The State Trading Corporation of India Ltd
- Gujarat Electricity Regulatory Commission - India
- India Bulls Power Limited - India
- Central Java Power - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Borneo Indobara - Indonesia
- Oldendorff Carriers - Singapore
- Directorate General of MIneral and Coal - Indonesia
- Bhatia International Limited - India
- Eastern Energy - Thailand
- Tamil Nadu electricity Board
- Indo Tambangraya Megah - Indonesia
- Kumho Petrochemical, South Korea
- Ind-Barath Power Infra Limited - India
- Ceylon Electricity Board - Sri Lanka
- Toyota Tsusho Corporation, Japan
- SMC Global Power, Philippines
- Renaissance Capital - South Africa
- Petron Corporation, Philippines
- Ambuja Cements Ltd - India
- Kartika Selabumi Mining - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Jindal Steel & Power Ltd - India
- Savvy Resources Ltd - HongKong
- Rio Tinto Coal - Australia
- Asmin Koalindo Tuhup - Indonesia
- Sical Logistics Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Eastern Coal Council - USA
- ICICI Bank Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Semirara Mining Corp, Philippines
- PTC India Limited - India
- Directorate Of Revenue Intelligence - India
- Posco Energy - South Korea
- Ministry of Transport, Egypt
- Indonesian Coal Mining Association
- Sarangani Energy Corporation, Philippines
- Sindya Power Generating Company Private Ltd
- Timah Investasi Mineral - Indoneisa
- TeaM Sual Corporation - Philippines
- Agrawal Coal Company - India
- CNBM International Corporation - China
- Alfred C Toepfer International GmbH - Germany
- Wood Mackenzie - Singapore
- Cement Manufacturers Association - India
- GAC Shipping (India) Pvt Ltd
- Bulk Trading Sa - Switzerland
- Meralco Power Generation, Philippines
- Indian Energy Exchange, India
- VISA Power Limited - India
- Planning Commission, India
- Attock Cement Pakistan Limited
- Formosa Plastics Group - Taiwan
- Iligan Light & Power Inc, Philippines
- Karaikal Port Pvt Ltd - India
- Lanco Infratech Ltd - India
- San Jose City I Power Corp, Philippines
- GMR Energy Limited - India
- Thai Mozambique Logistica
- Vijayanagar Sugar Pvt Ltd - India
- Kobexindo Tractors - Indoneisa
- Orica Australia Pty. Ltd.
- Karbindo Abesyapradhi - Indoneisa
- Merrill Lynch Commodities Europe
- Kalimantan Lumbung Energi - Indonesia
- Ministry of Finance - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Uttam Galva Steels Limited - India
- Price Waterhouse Coopers - Russia
- IHS Mccloskey Coal Group - USA
- Economic Council, Georgia
- Mercuria Energy - Indonesia
- Wilmar Investment Holdings
- Power Finance Corporation Ltd., India
- Carbofer General Trading SA - India
- Leighton Contractors Pty Ltd - Australia
- Grasim Industreis Ltd - India
- Chamber of Mines of South Africa
- Madhucon Powers Ltd - India
- Australian Commodity Traders Exchange
- Jorong Barutama Greston.PT - Indonesia
- Star Paper Mills Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- OPG Power Generation Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Edison Trading Spa - Italy
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sakthi Sugars Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Larsen & Toubro Limited - India
- Samtan Co., Ltd - South Korea
- Holcim Trading Pte Ltd - Singapore
- Aditya Birla Group - India
- Bayan Resources Tbk. - Indonesia
- European Bulk Services B.V. - Netherlands
- Minerals Council of Australia
- Romanian Commodities Exchange
- Parry Sugars Refinery, India
- Siam City Cement - Thailand
- Trasteel International SA, Italy
- Independent Power Producers Association of India
- Bhoruka Overseas - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Bahari Cakrawala Sebuku - Indonesia
- Kapuas Tunggal Persada - Indonesia
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